Update No. 25 – 18/09/11

I’ll be relatively brief this week; for there are a great many valuations I need to focus my efforts on at this time of year.  Wednesday evening (14^th), the time the first draft of this post being written, the S&PASX200 TR index (our benchmark) is down 15.3% since our April 1^stinception, our fund at this time is a few percentage points above it’s $1 foundation price, but is well down since July 1.  This is undoubtedly a difficult time to be an equity investor, for every bit of positive economic news we hear; I reckon we are hearing 6 or 7 negative pieces.  I have heard it described before that when all the financial commentators and talking heads are talking the market’s down, then that’s when you want to back the truck up and load up.  Though not universally bearish, there are not a lot of positive commentators around, so perhaps we’re getting close to the bottom?

The only thing that piqued my interest was the changes to the component stocks of the S&P indices.  Specifically, I thought it was an interesting reflection on the state of our economy that a newly enlarged Iluka Resources (ILU – a mineral sands miner) is replacing a newly shrunken Bluescope Steel (BSL).  It’s a shame that Australia appears destined not to be able to maintain a strong (read – profitable) domestic steel industry, but if we’re honest in our assessment, it’s been coming for a long time.  The industry may like to look at the high $AUD and the carbon-tax for scape-goats, but the fact remains, we are uncompetitive in these areas and unfortunately, if the market forces that drive the rise of ILU decide the demise of our domestic steel industry, then we must accept that and focus on those areas where we (as a nation) have a competitive advantage.

Reasons such as national security are cited when commentators discuss the need to maintain a domestic steel industry; these are invalid reasons to maintain an uncompetitive industry.  We will never be at war all at once with every other steel manufacturing nation in the world, so we shall always be able to buy from someone, if the asking price rises high enough, a domestic industry will likely sprout, that’s capitalism – Tony Hansen 18/09/11

EGP Fund No. 1 Pty Ltd. Down by 4.06%, leading the benchmarkby 4.51% since July 1^st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 4.02%, leading the benchmarkby 16.26% all-time (April 1^st2011).

EGP 20.  The EGP20 index is Down by 7.52%, leading the benchmarkby 1.05% since July 1^st.  Since inception the EGP20 is Down by 18.28%, lagging the benchmarkby 6.04% all-time (since April 1^st2011).

S&PASX200TR  The benchmark index is Down by 8.57% since July 1^st. The benchmark is Down 12.24% all-time (since April 1^st2011).